In a rock concert atmosphere, the president of El Salvador Nayib B Watch announced that his government will build a “Bitcoin City”On the ocean at the base of a volcano.
Bukele used a gathering of enthusiasts of Bitcoin Saturday night to launch his latest idea, just as he used a previous Bitcoin conference in Miami to announce in a video message that El Salvador would be the first country to make cryptocurrency legal.
A bond offering will take place in 2022 entirely in Bitcoin, Bukele said, wearing his signature backward baseball cap. And 60 days after the financing was ready, construction would begin.
The city will be built near the Conchagua volcano to harness geothermal energy to power both the city and the mining of Bitcoin, the energy-intensive solution of complex day and night math to verify currency transactions.
The government is already running a pilot Bitcoin mining venture at another geothermal power plant next to the Tecapa volcano.
Conchagua volcano on the ocean is located in the southeast of El Salvador, in the Gulf of Fonseca. The government will provide land and infrastructure and work to attract investors.
The only tax collected will be value added tax, half of which will be used to pay municipal bonds and the rest for municipal infrastructure and maintenance. Bukele said there would be no property, income or municipal taxes and the city would have zero carbon emissions.
The city would be built with the aim of attracting foreign investment. There would be residential areas, shopping malls, restaurants and a port, Bukele said. The president spoke about digital education, technology and sustainable public transport.
“Invest here and earn all the money you want,” Bukele told the cheering crowd in English at the close of the Latin American Bitcoin and Blockchain conference to be held in El Salvador.
Bitcoin has been legal tender along with the US dollar since 7 September.
The government backs Bitcoin with a $ 150 million fund. To incentivize Salvadorans to use it, the government has offered $ 30 in credit to those using its digital wallet.
Critics have warned that the currency’s lack of transparency could attract more criminal activity to the country and that wild swings in the value of the digital currency would pose a risk to those who hold it.
Bitcoin was originally created to operate outside of government-controlled financial systems, and Bukele says it will help attract foreign investment to El Salvador and make it cheaper for Salvadorans living overseas to send money to their families.
Concern between the Salvadoran opposition and outside observers grew this year as Bukele moved to consolidate power.
Voters gave control of congress to the president’s hugely popular party earlier this year. The new lawmakers immediately replaced members of the Supreme Court’s constitutional chamber and the Attorney General, leaving Bukele’s party firmly in control of the other branches of government.
The US government in response said it will shift its aid from government agencies to civil society organizations. This month, Bukele sent a proposal to congress that would require organizations receiving foreign funding to register as foreign agents.
